Magnit Accelerates Store Expansion as Russian Economy Recovers

Aug. 24 (Bloomberg) -- OAO Magnit, Russia’s second-largest
food retailer, said it will increase spending to accelerate
store openings as the country’s economy recovers from the worst
slump on record.

Capital spending may reach $1.3 billion this year, 30
percent more than the company forecast in March, as it seeks to
open almost two stores a day, Magnit said today in a statement.
The company, based in Krasnodar, southern Russia, plans to open
650 stores and 30 hypermarkets in 2010.

Russia’s July retail sales surged the most since November
2008, signaling recovery from last year’s 7.9 percent economic
contraction. Gross domestic product expanded 5.2 percent in the
second quarter.

The first-half results “instill optimism and confidence in
the targeted sales growth of 35 percent in ruble terms” this
year, billionaire Chief Executive Officer Sergei Galitsky said
in the statement.

Magnit added 260 stores and four hypermarkets in the first
half, pushing its store count to 3,492. Sales rose 32 percent in
the period to 103.7 billion rubles ($3.38 billion), while net
income gained 1.2 percent to 3.95 billion rubles.